The Gig Economy: Part-Time Workers, Big-Time Results

Get onboard the gig economy and grow your business.

Today's "gig economy," with a healthy supply of independent contractors ready to take on short-term roles, is good news for both companies and people. Companies have access to high-quality skill sets and operating expense savings, while workers enjoy entrepreneurial zest, work flexibility, and greater work-life balance.

It's no small wonder the ranks of contingent workers are growing, with four out of 10 people now categorizing themselves as independent contractors or other types of self-employed people. In 2005, such workers made up less than 12 percent of the labor force--a giant difference in just a little more than a decade's time.

What accounts for the skyrocketing increase? One major driving force is technology. "The internet, digital mobile devices, tools like Skype, and increasingly sophisticated software applications have made it easy for everyone to be virtually accessible on a global, 24/7 basis," says industrial and organizational psychologist Romy Gelles, Ph.D., principal at Philadelphia-based consulting firm Global Training Solutions, LLC. "This has made the world much smaller for sharing information and ideas."

A key factor driving companies to hire highly skilled people for short-term work assignments is that it can cost a lot less than employing a full-time employee. Companies aren't legally required to make contributions to Social Security, unemployment insurance, or workers compensation for independent contractors. They also don't have to provide health insurance, sick leave, overtime and vacation time, or other benefits like dental insurance and gym memberships. Add it all up, and the actual total cost of an employee can be as much as 1.4 times the person's base salary.

Because of this, many employers already have robust plans in place to use contingent workers in the future. According to a 2016 survey by Deloitte of more than 7,000 business and human resources leaders across the world, more than 71 percent of respondents ranked the contingent workforce trend as "important" or "very important."

Finding such workers-for-hire is also simpler these days, thanks to professional matchmaking websites like Upwork, OnForce, WorkMarket, Shiftgig, and FieldNation. Need a software application designer, creative writer, or graphic designer? Not only are they easy to locate, they may be more available for hiring than recruiting an equally skilled individual on a full-time basis.

But who exactly are these gig workers and which industries are hiring them? While all types of companies have hired contingent workers, the top three industry sectors in hiring mode are assembly, maintenance and repair; health care entities; and computer and IT support businesses. Such workers include independent contractors that provide a service or product, self-employed people, part-time workers, agency temps, direct salespeople, and on-call workers who come in and out of companies on an as needed basis.

All generations are attracted toward this labor concept, although most contingent workers are millennials. A key factor is their positive attitude about entrepreneurship. According to the 2016 Amway Global Entrepreneurship Report, 82 percent of individuals under the age of 35 have positive feelings about entrepreneurship, higher than other generational cohorts. The report also calculated entrepreneurial spirit, defined as the desire to start a business, being prepared to do it, and not letting family, friends or other social factors dissuade them. Again those under 35 ranked highest.

"Millennials are particularly attracted to the idea of entrepreneurship," says HR consultant Josh Bersin, founder and principal of Bersin by Deloitte at Deloitte Consulting. "Fifty years ago, people graduated college and went to work for others. There were few entrepreneurs and little interest in starting one's own business. Today, entrepreneurs have become celebrities making billions of dollars seemingly overnight. Not surprisingly, many young people want to emulate them."

Unlike their parents and grandparents, millennials have more available options to parlay their skills. "They can conduct business virtually and be just as effective as someone coming to the office," Gelles says. "They also can deploy their skills in different tasks. For instance, a software programmer might also have talent as a writer or a film director. With more control over their work lives, such multi-skilled people can pursue multiple jobs, a moonlighting phenomenon we call the 'portfolio career.'"

Even when millennials take full-time jobs, their tenure is often short--16 months on average for those between the ages of 20 and 24. The urge for additional work experiences and job independence is too strong to put on hold for long. "People want to work at home and in coffee shops," Bersin says. "And they can."

Not just young people are attracted to these work concepts. "Baby Boomers with key skill sets in technology, project management, marketing and other high demand talents are finding second careers as independent part-time professionals," Bersin says. "The old definitions of `retirement' are changing."

Down the line, expectations are for contingent workers to be as common as full-time ones. Already, 95 percent of organizations in a study by Ardent Partners perceive their contingent workforce to be just as important and vital to their day-to-day operations, enterprise success and growth as traditional full-time labor.

What is clear, with no age barriers, few geographic barriers and tremendous economic incentives, the gig economy is not just here, but here to stay.